Tom Lyon

School for Environment and Sustainability; and Stephen M. Ross School of Business

University of Michigan

United States

Professor Lyon is a leader in using economic analysis to understand corporate environmental strategy and how it is shaped by emerging government regulations, nongovernmental organizations, and consumer demands. His current research focuses on corporate environmental information disclosure, greenwash, the causes and consequences of renewable energy policy, and voluntary programs for environmental improvement.

Voting History

Statement Comments
The California Consumer Privacy Act will undermine the targeted advertising market by giving consumers the right to opt out of allowing companies to sell personal data to third parties. Strongly Disagree “If the targeted advertising market must rely on violating the wishes of consumers, it is very unlikely to be improving welfare. Should this cause it to fail, then good riddance.”
In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Strongly Agree “BlackRock, the world‘s largest asset manager, stated in its annual letter to CEOs that it is putting climate change front and center in its investing strategy going forward. CDP (formerly the Climate Disclosure Project) represents over 800 institutional investors with over $100 trillion in assets. Any companies that are not planning for climate risk at this point have their heads in the sand.”
Antitrust policy should intervene more decisively to limit the scope of large technology platforms. Agree “The Microsoft/Netscape case suggests Facebook should not have been allowed to buy Instagram or WhatsApp. However, in my view, the socially damaging effects of technology platforms such as Facebook are probably best dealt with through regulation rather than antitrust. The Cambridge Analytica scandal was not an antitrust issue nor are Russian bots or the spread of political disinformation.”
U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Neither Agree nor Disagree “Firms will vary greatly. Some big [multinational corporations] (e.g., automakers) will voluntarily abate at close to previous standards: They have sunk investments, expect regulations to be reinstated once Trump is ousted, and think about international rules, too. Smaller, myopic, domestic firms may try to cut costs by polluting more while they can.”
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation.
This shift will have material impact on the well-being of U.S. workers.
“The American public deeply distrusts big business. The Roundtable feels pressure to soften the view of corporations as too big, too driven by short-term share prices, and too powerful in Washington, D.C. But that didn't stop Roundtable member Amazon from cutting health benefits for part-time workers. The 'statement' will help workers if unions hold firms to it — otherwise, it's empty talk.”
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage. Strongly Agree “A technological lead is usually valuable. This may be especially important in autonomous vehicle technology, which will rely on 5G networks.”
The increase in stock market volatility that began in 2018 will last for another three to five years. Disagree “This is hard to assess. With respect to U.S. stocks, a significant amount of volatility today is due to policy uncertainty around tariffs, other trade issues, whether the ACA will be repealed or not, whether the U.S. will continue to tear down relationships with allies and support autocrats, corruption, etc. It is possible the 2020 election will usher in greater stability.”
A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Agree “The S&P 500 obtain about 2% to 3% of their revenue from the U.K., so there will definitely be an impact on U.S. firms. Even firms that do not derive revenue from the U.K. will feel general equilibrium effects due to rising trade uncertainties. In June 2016, after the initial shock of the Brexit vote, even the least revenue-exposed firms lost about 2% of value.”
China is no longer the most attractive growth opportunity for Western multinationals. Agree “Wages in China have risen and so has competition from domestic firms. At the same time, growth in China is slowing and Trump’s trade war creates ongoing uncertainty for those thinking about investing in China. Vietnam is already drawing off low-wage jobs, and growth prospects in Africa are looking up.”
In the next five years, the blockchain will have a transformative effect on finance in emerging markets. Disagree “The financial industry is constantly crowing about the value created by its latest innovation. I tend to side with Paul Volcker, who said in 2009 that the ATM is the only useful innovation in banking over the last 20 years.”
Amazon’s new $15 per hour minimum wage will force other companies to follow suit. Agree “Not all firms will feel a need to follow, but Amazon has gotten a lot of attention for this. There will be increased pressure on other large, well-known companies that have a wide range of skill levels (and pay levels) within the company.”
Restrictions on skilled immigration will cause US firms to to shift more operations overseas. Agree “I suspect the larger effect will be to simply make U.S. firms less competitive, but we will see some offshoring among firms facing skills shortages here in the U.S.”
Uber has to develop self-driving cars in the next 10 years in order to remain viable. Disagree “Many other companies are working on autonomous vehicles, from Google to Ford. I’m not sure Uber has the capacity to win this game, and anyway, they can always adopt others’ successes.”
A trade war will be more disruptive to business than to consumers. Agree “Consumers will face price increases that will be annoying but not call for fundamental changes to their daily lives. Some businesses will actually be forced out of business — true disruption.”
Concern over consumer privacy will fundamentally limit businesses’ ability to use big data. Disagree “I think the barn door is open and the horse has already left.”